NSW storms: claims surge but cost unclear
The mounting insurance cost from storm damage in NSW has reached $280 million, but a final figure is likely to be much higher. The experience of two of the nation’s largest underwriters, Suncorp and QBE, illustrates just how difficult it is for firm estimates to be reached.
More than a week after storms swept through the Hunter region and Central Coast, Suncorp has received 13,500 claims – most submitted to subsidiaries of newly acquired Promina. Suncorp says it will inform the market once an accurate estimate is available.
CEO John Mulcahy says Suncorp has additional capacity to handle claims through catastrophe reinsurance retention of $100 million.
“As was the case following Cyclone Larry, we will deal with our customers on a case-by-case basis while taking into account the difficult circumstances they face,” he said.
Although at this point Suncorp has received 4500 more claims than chief rival IAG, it is believed they constitute a lower average and analysts are predicting losses of about $120 million.
KMPG Insurance Partner Andries Terblanche says the recent amalgamation of Promina may be part of Suncorp’s difficulty in calculating a final figure. It is too early to put a final cost on flood damage, as forecast rain in the region will extend the timetable.
“The longer it rains the harder it becomes to assess the damage,” he said.
IAG expects claims to reach $169 million, which would reduce the company’s expected full-year profit to about $725 million.
QBE released a two-paragraph statement to the Australian Stock Exchange, saying its estimated net claims are within the substantial allowance for large losses and catastrophes included in targets for 2007 previously notified to the market.
The company previously forecast a 20% increase in net profit before tax over its 2006 result of $1.48 billion. No claim or loss estimates were given, but analyst UBS says QBE’s exposure should be limited to about 250 claims.
The Insurance Council of Australia (ICA) says the general insurance industry has received about 29,000 claims, and the number will increase over coming weeks.
More than a week after storms swept through the Hunter region and Central Coast, Suncorp has received 13,500 claims – most submitted to subsidiaries of newly acquired Promina. Suncorp says it will inform the market once an accurate estimate is available.
CEO John Mulcahy says Suncorp has additional capacity to handle claims through catastrophe reinsurance retention of $100 million.
“As was the case following Cyclone Larry, we will deal with our customers on a case-by-case basis while taking into account the difficult circumstances they face,” he said.
Although at this point Suncorp has received 4500 more claims than chief rival IAG, it is believed they constitute a lower average and analysts are predicting losses of about $120 million.
KMPG Insurance Partner Andries Terblanche says the recent amalgamation of Promina may be part of Suncorp’s difficulty in calculating a final figure. It is too early to put a final cost on flood damage, as forecast rain in the region will extend the timetable.
“The longer it rains the harder it becomes to assess the damage,” he said.
IAG expects claims to reach $169 million, which would reduce the company’s expected full-year profit to about $725 million.
QBE released a two-paragraph statement to the Australian Stock Exchange, saying its estimated net claims are within the substantial allowance for large losses and catastrophes included in targets for 2007 previously notified to the market.
The company previously forecast a 20% increase in net profit before tax over its 2006 result of $1.48 billion. No claim or loss estimates were given, but analyst UBS says QBE’s exposure should be limited to about 250 claims.
The Insurance Council of Australia (ICA) says the general insurance industry has received about 29,000 claims, and the number will increase over coming weeks.